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Siti Cable plans capex of Rs 1000 cr for FY16, to deploy MPEG-4 STBs in Phase III

MUMBAI: Siti Cable Network has a
capital expenditure plan of Rs 1,000
crore (Rs 10 billion) in FY16 and has
decided to initially deploy MPEG-4
set-top boxes (STBs) in Phase III
towns of digital addressable system
The deployment of MPEG-4 STBs will
help the MSO to save on bandwidth cost
that it needs to pay to telecom
operators for using their fibre to link
signals from its Phase I and II digital
headends to Phase III towns.
“We have not seeded any MPEG-4 box
so far. We have ordered for them.
This will give us a competitive edge
and our viewers a better experience,”
Siti Cable CEO VD Wadhwa told media
Siti Cable will start seeding MPEG-4
STBs from October. The first
deployment will be in markets where
the MSO is expanding.
“Ideally, we would like to convert all
our existing metro customers into
MPEG-4. But we do not have the
bandwidth to do so at this stage as we
will initially be seeding these in Phase
III towns,” said Wadhwa.
Siti Cable is giving STBs free to local
cable operators (LCOs) in certain DAS
Phase II cities where it is
strategically expanding. “Wherever
due to strategic reasons we have to
give boxes free, we do that,” Wadhwa
Out of the Rs 1,000-crore planned
capex for FY16, Siti Cable will invest
Rs 167 crore (Rs 1.67 billion) in
broadband and the rest will be for
cable. Minus the activation revenue
(income the MSO gets for the STBs),
the capex would be Rs 550 crore (Rs
5.5 billion).
The multi-system operator (MSO)
intends to seed 5.5 million STBs and
take its total digital subscriber base
to 11 million by the end of FY16.
“We have a capex plan of Rs 1,000
crore in FY16, out of which Rs 167
crore is for broadband. Our aim is to
seed 5.5 million boxes and end FY16
with 11 million digital subscribers,”
Wadhwa said.
In the fiscal first quarter, Siti
Cable’s capex stood at Rs 40 crore (Rs
400 million). While Rs 33 crore (Rs
330 million) was invested in the cable
side, broadband consumed just Rs 7
crore (Rs 70 million). Only 200,000
STBs were seeded in the quarter.
The capex of Rs 1,000 crore will be
required only if the deadline of 31
December 2015 for Phase III does not
get extended. Otherwise, demand for
STBs would continue to be slow.
Net ARPU from LCOs
In Phase II cities, Siti Cable expects
its net subscription revenue from
LCOs to touch Rs 90 (plus taxes) a
subscriber per month in the exit
quarter of FY16, up from Rs 75 (plus
In Phase I cities, net monthly ARPU in
the exit quarter of FY16 should be
Rs110 (plus taxes), up from Rs 100.
Carriage revenue
Siti Cable expects carriage revenue to
grow 10 per cent annually. In FY15,
the MSO reported carriage revenue of
Rs 249 crore (Rs 2.49 billion), up 9.6
per cent from the year-ago period.
Siti Cable has 12,000 prepaid
subscribers. The process has been slow
and it requires a lot of consumer
awareness to drive it, Wadhwa said.
Siti Cable’s gross debt stands at Rs
1,300 crore (Rs 13 billion) and net
debt is at Rs 1,100 crore (Rs 11

Siti Cable plans capex of Rs 1000 cr for FY16, to deploy MPEG-4 STBs in Phase III

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